Building smart warehouses with IoT

The Internet of Things (IoT) has brought a new level of connectivity to the industries across the board. Warehouse and logistics managers are using the technology to increase operational efficiency, save money and add value to their business.

Consumer expectations are expected to drive increased investment in IT and operational functions in warehouses over the next four years, according to the Warehouse Vision Report by Zebra Technologies. Based on the report, 51 percent of those surveyed expected to increase investment in real-time location systems that track inventory and assets throughout their warehouses in 2015; this number increases to 76 percent by 2020. Furthermore, it found that 62 percent of those surveyed had plans to increase their usage of IoT by 2020.

Investment in systems such as real-time location, along with increased usage of IoT, will not only help warehouses become smarter but also help warehouse managers meet new goals for efficiency.

From average to smart

Better sensing, real-time analytics, robotics, automation, wearables and video together can create smarter warehouses. Yet building a smart warehouse can be a daunting task. “The major issue is where to start and what value it will add — and then how to start funding capabilities,” said Douglas Bellin, Industry Lead at Cisco Systems. As with any business, the value of implementing new technology is not in the initial cost — it is in the long-term benefits and its ability to solve multiple issues.

For instance, adding wireless to a warehouse just for the sake of adding wireless wouldn’t make sense; however, if the wireless could be applied to video feeds (instead of multiple cables to the video cameras), for location-based services (tracking items over wireless), voice communications, scanners, wearables and others, as Bellin explained, “you start to see accelerators of the return on investment versus just as a single technology for a point offering.”

Bellin sees trending technologies such as IoT, big data, wearables, and the cloud all being increasing adopted by warehouses. Cisco is adding additional sensors for noise, temperature, power use and more as part of its IoT offering for supply chain management. The company is also using the cloud as “a capability to try new software and produce agile capabilities in process changes,” according to Bellin. “This allows us to not have to build large data on site, but also then integrate data from multiple sources to add new value levels. This then integrates big data into new capabilities.”

RFID in smart warehouses

Using RFID in warehouses isn’t new — warehouses have been using RFID for quite a while. However, as the technology has matured, it is now being used across many businesses in closed-loop solutions, according to Mark Thomson, Retail Industry Director of EMEA at Zebra Technologies. “RFID smart tags can store significantly more information than barcodes and are, among others, an effective means against counterfeit. That is why industries with expensive products such as textiles or luxury goods rely on RFID tracking,” he said. Using RFID also allows the possibility to measure the size and weight of packages in the warehouse. By doing so, the technology could enable more optimized loading of trucks. This could be done by capturing the proportions and weight of a package during the loading process with a forklift that is accordingly equipped.

Thomson provided the following example: “A truck is to depart in 15 minutes but is only half full. With the analysis of the warehouse data, suitable packages — that can be located with an accuracy of up to 1 meter at present and 30 centimeters in the future — will be chosen to optimize the truckload for the upcoming tour. A fully loaded truck means fewer tours. The fuel savings benefit both the company and the environment.”

Although the use of RFID in industries with expensive products is more common, use in single-item tracking, particularly in low-cost sectors, is scarce for economic reasons. Thomson noted that as the price of RFID tags and sensors continues to fall, their use will extend to the entire supply chain, from manufacturer to retail store.

Warehouse wearables

Wearables are becoming more and more mainstream, extending into the warehouse and logistics industry. Popularity of wearables taking advantage of voice technology is slowly picking up in the logistics market. According to the report by Zebra Technologies, 72 percent of polled logistics experts expect their business to have adopted speech-directed picking solutions by 2020.

More than just a trend, wearables such as data glasses, headsets, ring scanners and arm terminals, provide a hands-free way to work. “Workers no longer need to hold scanners, tablets or mobile devices and can act hands-free, which ensures a significant increase in productivity,” Thomson said. He also noted the superior usability of wearables in picking and receiving. Cisco Systems is currently working with smart glasses to do handless pick and packing, as well as real-time alert notification where users are able to see issues in real time and react to them without having to go to other disparate systems, according to Bellin.

Warehouse of the future

The role of warehouses in supply chain efficiency is becoming increasingly important, so it is no surprise that warehouse managers are looking at new technologies to meet demands. Major companies like Amazon and UPS are already employing smart technologies such as wearables in their warehouses, and it won’t be long before others follow. Although widespread implementation of smart warehouses may not be imminent, it is definitely the future.